Desired Ending Inventory Is 25% More Than Beginning Inventory

question 77

Multiple Choice

Desired ending inventory is 25% more than beginning inventory. If purchases total $160,000, which of the following statements is true regarding cost of goods sold (COGS) ?

• A)COGS will exceed cost of goods available for sale.
• B)COGS will be less than purchases.
• C)COGS will exceed purchases.
• D)COGS will equal $55,000.

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Definitions:

Net Asset

The total assets of an individual or entity minus all its liabilities.

Retirement System

A structured program, often government-sponsored or managed by private entities, designed to provide financial support to individuals during their retirement years.

Pay-As-You-Go Principles

A funding approach where current revenues (like taxes) are used to pay for current expenses, avoiding debt by paying for services and benefits as they are received.

Life Expectancy

The average period that a person may expect to live, often used as a statistical measure of the health of a population.